BWD Securities PLC

Final Results

BWD Securities PLC
11 February 2003

11 February 2003

                           BWD SECURITIES PLC ('BWD')
                                30 NOVEMBER 2002

BWD, the Investment Management Group

Key Points:

  • Profit before tax* of £8.0m (2001: £8.1m)

  • Basic earnings per share* of 25.4p (2001: 26.8p)

  • Total dividend of 18.0p per share (2001: 18.0p)

  • Turnover of £37.5m (2001: £37.9m)

  • Group fee and other recurring income of £23.4m (2001: £22.4m)

  • Group managed funds of £3.5bn (2001: £4.0bn)

  • Disposal of Administration Services division announced on 20 January 2003

*figures stated before goodwill amortisation and profit on disposal of

Mike Burns, Chief Executive of BWD Securities, commented:

'In such a difficult operating environment, it is pleasing to be able to report
these solid results.  The  underlying strengths of the business leave it well
placed to capitalise on opportunities that may arise to develop the core
business further.'

For further information, please contact:

BWD Securities PLC
Michael Burns, Chief Executive                       Tel: 0151 227 2030

Hudson Sandler
Nick Lyon/Keith Hann                                 Tel: 020 7796 4133


Financial results

The difficult conditions of 2001 continued throughout the year to 30 November
2002, with markets experiencing further significant and sustained falls from
June 2002 and continuing throughout the autumn.  The 19% decline in the FTSE
All-Share Index during the six months to 30 November 2002 has, inevitably, led
to some deterioration in the financial performance of the Group during the
second half of the financial year.

Despite these challenging conditions, it is pleasing to be able to report
profits before tax of £8.0 million (2001: £8.1 million) and basic earnings per
share of 25.4p (2001: 26.8p).   These figures are prior to goodwill amortisation
of £952,000 (2001: £622,000) and an exceptional profit in 2001 of £261,000
arising from property disposals.


The Directors are recommending a final dividend for the year of 12p (2001: 12p)
which taken together with the interim dividend of 6p (2001: 6p), produces an
unchanged total dividend for the year of 18p.

Disposal after the financial year end

It was announced on 20 January 2003 that, subject to shareholder and regulatory
approval, the Group has reached agreement to dispose of its Administration
Services division for a total cash consideration of £18.47 million.
Additionally, the principal property occupied by the Administration Services
division is to be sold for a cash consideration of £1.42 million which, after
deducting expenses and tax, will bring the net sales proceeds arising from this
transaction to approximately £19 million.  Further details of this transaction,
which is expected to be completed during February 2003, are provided in the
Chief Executive's Review.

Board and employees

After six years as a director, including the last three as Chairman, I have
decided to retire from the Board at the Company's forthcoming Annual General
Meeting on 31 March 2003, at which time Christopher Clarke, who joined the Board
in 1999, will succeed me as Chairman. Tim Jason Wood, who has served as a
director of the Company since 1988, has also decided to retire from the Board on
25 September 2003 and I would like to acknowledge the significant contribution
Tim has made to the development of the Group over this fifteen year period.

During the year the Board were pleased to be able to announce the appointment of
Nick Lane Fox and Robert Allen as executive directors and Andrew Tyrie and
Katrina Michel as non-executive directors. The cross-section of skills that
these individuals bring to the Board will undoubtedly assist in developing the
business further.

In such a difficult environment, the financial results are a testimony to the
hard work and professionalism of the employees across the Group.  On behalf of
the Board and the shareholders I would like to thank all employees for their
contribution during this time.


Reflecting on my time as Chairman, it is with pride that I am able to point to
the solid financial results of the Group during the particularly challenging
last two years faced by all businesses operating within the financial markets.
Although the difficult trading conditions are expected to continue during the
year ahead, the Board is confident that all businesses within the Group will
continue to trade profitably and are well positioned to capitalise on the longer
term opportunities that may arise from this operating environment.

I would like to wish my successor, Christopher Clarke, a similarly enjoyable
period in office and to thank all the directors and employees for their
enthusiasm and support.

Alan Bottomley
10 February 2003


Group fee and other recurring income increased by 4% to £23.4 million (2001:
£22.4 million) despite a marginal decrease in group turnover to £37.5 million
(2001: £37.9 million).  Fee and other recurring income now represents 78% of
group operating expenses (2001: 73%).

The difficult market conditions, to which I have referred in previous reviews,
have continued throughout 2002.  For UK equities, the major constituent of most
of our clients' portfolios, this is now the deepest bear market since 1974.  A
combination of the further unravelling of the excesses of the late '90s together
with corporate scandals in the US and geo-political concerns  have been major
contributing factors.  As a result average market levels were significantly
lower in our second half year than the first and we entered our new trading year
with the  UK equity indices only slightly above the low point seen in late
September 2002.

Investment Management - Turnover £ 32.5 million; Operating profit before
goodwill amortisation £6.3 million.

BWD Rensburg - Fee paying clients' funds were £1.54 billion (2001: £1.65
billion) inclusive of ISA and PEP funds of £403 million (2001: £457 million).
Other managed funds were £1.65 billion (2001: £2.04 billion), bringing total
clients' funds under management to £3.19 billion (2001: £3.69 billion)
representing a fall of approximately 14%.  Since the FTSE All-Share Index fell
by 20% over the twelve month period to 30 November 2002, this demonstrates the
ability of the business to retain its existing client base and to maintain
organic growth in difficult conditions.

Investor confidence has not only been affected by weak equity markets; it has
also been sapped by the particular problems of the life assurance and split
capital sectors so that traditional forms of saving have become unpopular.  A
detailed review of the Group's exposure to clients deriving from their holdings
of split capital investment trusts has been undertaken, from which, based on the
facts at the present time, it is believed that there is no material liability to
the business.

We believe that equities currently represent good value and that in due course
their qualities will again be recognised.  The population is gradually being
made aware of the need to save for retirement but the range and complexity of
solutions highlights the need for appropriate financial advice and sound
investment management, which is where our expertise lies.

Over the past year considerable time and effort has gone into implementing the
Financial Services Authority's new rules.  As we look ahead we see further
changes being constructed in Brussels and evidencing themselves in draft
Directives.  APCIMS, our financial trade organisation, is active in the
consultation process and we play our part too by making representations on our
clients' behalf through the various boards and working parties on which several
of our senior managers serve.

The integration of Dennis Murphy Campbell, an established City of London private
client stockbroking business acquired in July 2001, was completed successfully
during the year.  This operation has recently relocated to a larger office
within the City, which will assist in facilitating its anticipated future

Capital for Companies had year end funds under management of £29 million (2001:
£36 million), which have produced a respectable performance in adverse market
conditions.  The business has continued to invest selectively on behalf of the
two Venture Capital Trusts it manages.

Unit Trust Managers - Strong net sales of £45 million over the year contributed
to funds under management increasing slightly to £296 million (2001: £294
million) despite the steep market falls over the year.  This performance
reflects continued confidence in the ability of the investment team, combined
with the higher profile of the business amongst its target client base.  The
product range was recently extended to eight unit trusts, with the successful
launch in October 2002 of the BWD UK Micro-Cap Growth Trust.

Administration Services - Turnover £5.0 million; Operating profit before
goodwill amortisation £1.0 million.

On 20 January 2003 it was announced that, subject to shareholder and regulatory
approval, agreement has been reached for the disposal of the Administration
Services division of the Group.  This division comprises Northern Registrars,
the Connaught St Michaels Group of companies that were acquired on 16 August
2002 and Northern Administration.

Northern Registrars / Connaught St Michaels Group - The Connaught St Michaels
Group of companies was the UK's fifth largest CREST Tier 1 registrar and was
acquired by Northern Registrars on 16 August 2002.  This business is now
successfully integrated within Northern Registrars and takes the total number of
clients to in excess of 500.   Northern Registrars has continued throughout 2002
to deliver organic growth and develop further the services it offers to clients.
  Inevitably, this business has been affected by the general reduction in share
transfer volumes and by the low levels of corporate activity across the year.

Northern Administration - Collective funds administered on behalf of third
parties were £0.8 billion (2001: £0.9 billion) reflecting the decline in the
level of the main market indices over the period.

On behalf of the Board I would like to thank Alan Bottomley for his leadership
and wise counsel during his period of office.  We wish him a very happy
retirement.  Finally, I would like to thank all the Group's employees for their
efforts in achieving such creditable results in difficult circumstances.

Michael Burns
10 February 2003

Consolidated profit and loss account
for the year ended 30 November 2002
                                                                                       2002             2001
                                                                                      £'000            £'000

Turnover                                                                             37,499           37,856

Operating expenses                                                                  (30,194)         (30,640)

Goodwill amortisation                                                                  (952)            (622)

Total administrative expenses                                                       (31,146)         (31,262)
                                                                                    _______          _______
Operating profit                                                                      6,353            6,594

Profit on disposal of properties                                                          -              261

Net interest receivable                                                                 721              885
                                                                                    _______          _______
Profit on ordinary activities before                                                  7,074            7,740

Tax on profit on ordinary activities                                          1      (2,517)          (2,615)
                                                                                    _______          _______

Profit on ordinary activities after                                                   4,557            5,125

Dividends                                                                     2      (3,913)          (3,789)
                                                                                    _______          _______
Retained profit for the year                                                            644            1,336
                                                                                    _______          _______

Earnings per share before goodwill
amortisation and profit on disposal
of properties                                                                 3

Basic                                                                                  25.4p            26.8p

Diluted                                                                                25.0p            26.2p

Earnings per share                                                            3

Basic                                                                                  21.0p            24.9p

Diluted                                                                                20.7p            24.4p

Turnover and operating profit relate entirely to continuing operations.

Consolidated balance sheet
at 30 November 2002
                                                                                         2002          2001
                                                                                        £'000         £'000
Fixed assets

Intangible assets                                                                      19,038        16,375

Tangible assets                                                                         5,281         6,279

Investments                                                                               500           511
                                                                                      _______       _______

                                                                                       24,819        23,165
                                                                                      _______       _______

Current assets

Debtors                                                                                27,103        31,532

Cash at bank and in hand                                                               21,618        22,468
                                                                                      _______       _______
                                                                                       48,721        54,000

Amounts falling due within one year                                                   (38,469)      (37,722)
                                                                                      _______       _______
Net current assets                                                                     10,252        16,278

                                                                                      _______       _______
Total assets less current liabilities                                                  35,071        39,443


Amounts falling due after more than one year                                           (4,024)       (9,064)

Provisions for liabilities and charges                                                   (122)         (150)

                                                                                      _______       _______
Net assets                                                                             30,925        30,229

                                                                                      _______       _______
Capital and reserves

Called up share capital                                                                 2,208         2,204

Share premium account                                                                   9,234         9,186

Capital redemption reserve                                                                100           100

Revaluation reserve                                                                       275           275

Other reserves                                                                          6,086         6,086

Profit and loss account                                                                13,022        12,378
                                                                                      _______       _______
Equity shareholders' funds                                                             30,925        30,229
                                                                                      _______       _______

The restatement of the 2001 figures relates to the implementation of FRS19.
Further details are set out in note 4.

Consolidated cash flow statement
for the year ended 30 November 2002

                                                                                          2002          2001
                                                                   Note                  £'000         £'000

Net cash inflow from operating activities                          a                     8,780         6,946

Returns on investment and servicing of finance

Interest received                                                                        1,444         1,076

Interest paid                                                                             (456)         (456)

Taxation paid                                                                           (2,559)       (3,559)

Capital expenditure and financial investment

Purchase of tangible fixed assets                                                         (614)       (1,362)

Net proceeds from sale of properties                                                         -         1,423

Proceeds from sale of tangible fixed assets                                                820           117

Proceeds from sale of fixed asset investments                                                -            10

Acquisitions and disposals

Purchase of subsidiary undertakings                                                     (4,400)       (2,000)

Costs associated with acquisition                                                         (107)         (301)

Cash acquired with subsidiary                                                              838             -

Equity dividends paid                                                                   (3,898)       (3,582)
                                                                                       _______       _______
Cash outflow before financing                                                             (152)       (1,688)


Issue of ordinary share capital                                                             52         5,603

Increase in debt                                                                              -        4,000

Redemption of loan notes                                                                  (750)         (813)
                                                                                       _______       _______

(Decrease)/increase in cash in the year                            b                      (850)        7,102
                                                                                       _______       _______

Notes to the consolidated cash flow statement
a. Reconciliation of operating profit to operating cash flows

                                                                                    2002          2001
                                                                                   £'000         £'000

Operating profit                                                                   6,353         6,594

Amortisation of goodwill                                                             952           622

Depreciation                                                                       1,006         1,113

Profit on disposal of tangible fixed assets                                         (163)          (12)

Loss/(profit) on disposal of fixed asset investments                                  11            (8)

Shares subject to grant of a nil cost option                                           -           256

Decrease in debtors                                                                4,494         5,912

Decrease in creditors and provisions                                              (3,873)       (7,531)
                                                                                 _______       _______

Net cash inflow from operating activities                                          8,780         6,946
                                                                                 _______       _______

b. Analysis and reconciliation of net funds

                                                     At 1 Dec           Cash        Other      At 30 Nov
                                                         2001           Flow      Changes           2002
                                                        £'000          £'000        £'000          £'000

Cash and deposits                                      22,468           (850)           -         21,618

Debt due after one year                                (4,416)              -       4,416              -

Debt due within one year                                 (750)           750       (4,416)        (4,416)
                                                      _______        _______       _______       _______
Net Funds                                              17,302           (100)           -         17,202
                                                      _______        _______      _______        _______

                                                                                     2002           2001
                                                                                    £'000          £'000

(Decrease)/increase in cash                                                          (850)         7,102

Repayment of debt                                                                     750            813

Loans drawn down                                                                        -         (4,000)

Reclassification of deferred consideration                                              -          2,550
                                                                                  _______        _______

Movement in net funds in the year                                                    (100)         6,465

Net funds brought forward                                                          17,302         10,837
                                                                                  _______        _______

Net funds at 30 November                                                           17,202         17,302
                                                                                  _______        _______


1.     Corporation tax

Corporation tax at 30% (2001: 30%)

2.     Dividends
                                                                                         2002          2001
                                                                                        £'000         £'000

Interim paid of 6.0p per share (2001: 6.0p)                                             1,304          1,195

Proposed final of 12.0p per share (2001: 12.0p)                                         2,609          2,594
                                                                                       _______       _______

                                                                                        3,913          3,789
                                                                                      _______        _______

The Directors are recommending a final dividend of 12.0p per share (2001:
12.0p), which together with the interim dividend of 6.0p per share (2001: 6.0p)
makes a total dividend for the year of 18.0p per share (2001: 18.0p).  The
proposed dividend, to be paid on 8 April 2003 to shareholders that are on the
register at the close of business on 14 March 2003, is calculated on 21,737,879
ordinary shares.  This excludes 339,250 ordinary shares held by the Employee
Share Ownership Trust for which all dividends have been waived.

3.    Earnings per share

Basic earnings per share before goodwill amortisation and profit on disposal of
properties is calculated with reference to earnings for shareholders of
£5,509,000 (2001: £5,516,000) and the weighted average number of shares in issue
during the year of 21,695,323 (2001: 20,585,873).  Basic earnings per share is
calculated with reference to earnings for shareholders of £4,557,000 (2001:

Diluted earnings per share is the basic earnings per share, adjusted for the
effect of the conversion into fully paid shares of the weighted average number
of all employee share options outstanding during the year.  The number of
additional shares used for the diluted calculation is 295,417 shares (2001:

4.    Prior year adjustment

The accounting policies used in the preparation of the financial information
contained in this document have been applied consistently with the exception of
deferred taxation, following the implementation of FRS 19.  The adoption of FRS
19 has resulted in the recognition of deferred tax assets at 30 November 2001 of
£302,000.  The effect on the result for the year is a reduction in the tax
charge of £61,000 and an increase in profit for the year ended 30 November 2002
of £61,000.  There is no material effect on the profit for the year ended 30
November 2001.

Basis of preparation

The financial information in this press release does not constitute statutory
accounts within the meaning of section 240 of the Companies Act 1985, but is
derived from the accounts.  Statutory accounts for 2001 have been delivered to
the Register of Companies, and those for 2002 will be delivered following the
Company's Annual General Meeting.  The independent auditors have reported on the
accounts for both 2001 and 2002; their reports were unqualified and did not
contain statements under section 237 (2) or (3) of the Companies Act 1985.

Full Accounts

The full accounts will be posted to shareholders on 27 February 2003 and will be
available at the Company's registered office from this date, and on the Group's
website at

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